COMPREHENSIVE NATIONAL INSURANCE. THE EMPLOYERS' CONTRIBUTION.
[To the Editor of the SPECTATOR.]
SIR,—Sir J. A. R. Marriott, M.P., in his informative article in your current issue, invites criticism of his scheme. You were good enough to publish a letter from me in your issue of March 8th. May I ask Sir J. A. R. Marriott and others interested to refer to that letter for an aspect of the employers' contribution to insurance not apparently understood and not yet answered?
It is suggested that the employer with 500 workpeople shall be required to pay for comprehensive workpeople's insurance about £62 per week or £3,200 per year. The manufacturer who employs probably 95 per cent. more people than does the merchant who sells his goods, and who may make no greater profit than the merchant, will pay over £3,000 per year against the merchant's payment of £150. If the manufacturer earns a profit of £5,000 a year before paying the £3,000 for insurance taxation, the latter payment equals an extra Income Tax of, say, 12s. in the pound. The manufacturer would then have to pay the ordinary Income Tax on the balance of about £2,000.
In 1913-14 the Employers' Parliamentary Association (of which Sir Charles Macara was president). obtained inforrhation certified by accountants showing the equivalent
of National Health Insurance charges upon employers—then 3d. weekly per person employed—to Income Tax then paid by the employers on their profits. The returns showed that such payment varied from 2 per cent. on profits in the case of linen manufacturers, to 6 per cent. for cotton spinners, 9 per cent. for engineers and 15 per cent, for cotton weaving and flax manufacturers. The figures were based on an average for the three previous years. Now the employer pays ls. 3d. per head employed, and it is proposed that he shall soon be required to pay 2s. 6d. per head, or ten times more than when the aforesaid inquiry was made !
It was and is clearly and utterly impossible for employers, as such, to pay such exorbitant and overwhelming insurance taxation. It is obvious that the employer, as such, pays nothing or next to nothing, that the insurance charges are put upon the cost of production and are paid for in the ultimate price by the consumer, who is thereby indirectly taxed to the extent of the so-called employers' contribution and his additional charges such as are paid for profits on all indirect taxation charged on commodities. Hence high prices, bad trade and unemployment.
My submission is that the true economic method of con- tributing to the cost of National Insurance would be to have two contributors only, the workpeople and the State, instead of three, the workpeople, the employers and the State, and that the employers' contribution is a delusion and an extrava- gant way of obtaining the money required.—I am, Sir, Ike.,
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